The principle of conservation of energy states that energy is neither created nor destroyed; it is just transformed from some types of energy into others. The total amount of energy in these transformations remains constant; that is, the total energy is the same before and after every transformation.
In the case of mechanical energy it can be concluded that, in the absence of friction and without the intervention of any external work, the sum of the kinetic and potential energy remains constant. This phenomenon is known as the principle of conservation of mechanical energy.
The following visual will help you to understand more clearly what is meant by the principle of conservation of energy when a body falls. Click on help to see the possibilities offered by the visual.